Food price hikes
are hitting Africa’s urban populations harder now than in 2008 and pose
a serious challenge to some of the continent’s leaders, who face
elections this year, a World Bank official said.
Policy makers
across the globe are fighting rising food prices, currently 36 per cent
higher than levels this time last year and near peaks from 2008,
according to the World Bank’s food price index.
“This time, because
it is a more broadly based price increase, because it brings in fuel
prices as well, the impact is more urban-based,” Karen Brooks, the
bank’s Africa agriculture sector manager, told Reuters, citing
increased pressure on wheat and maize costs.
“It is also coming
at a time of many elections in Africa, and so this goes into a
political context which makes it very challenging for governments to
manage,” she added.
The 2008 spike in
food prices led to violent demonstrations across much of Africa.
Protests have returned to the streets of some capitals, while tense
elections are due later this year in Cameroon, Liberia, Democratic
Republic of Congo, amongst others.
Ms Brooks said the
bank was particularly worried about the situation in Uganda, where the
opposition has latched onto complaints over rising prices and organised
protests, some of which have turned violent.
“It is not on the scale that we are seeing in North Africa, but there are very great concerns,” she said.
In the aftermath of
the 2008 crisis, world leaders in 2009 pledged some $20 billion to spur
agricultural investment in poor nations and fight hunger.
Ms Brooks said
investors were excited about African agriculture, but that the
continent was still missing out due to lingering fears over land
rights, taxation and stability, as private funds flow into Latin
America and Central Asia.
African leaders
have committed to devoting 10 per cent of their budgets to agriculture,
as part of efforts to bridge investment gaps. But Ms Brooks said
results were mixed.
“There were
substantial commitments made, but it has been very difficult for the
donors to actually follow up on the commitments as the financial crisis
hit,” she said, adding that complex accounting methods by donors meant
it was a puzzle to work out what had been delivered by whom so far.
Four pillars
Meanwhile, some
African nations have made progress in adopting policies and most have
recognised the urgency, but just a handful are meeting the 10 per cent
budget target.
Better weather has supported harvests this year, but the deficit remains vast.
“Of course, they
aren’t doing enough. There is such a deficit of investment in
agriculture that has accumulated over the last 20 years that there is
quite a lot that has to be done,” Ms Brooks further said.
She added that the
bank was focusing on four main issues: land and water management,
technology, agricultural markets and infrastructure, and food security
and vulnerability.
“There are so many
accessible advances in science that could be applied in Africa, but
they require the participation of African scientists in order to figure
out the best varieties,” she said, citing as an example the choice of
best hybrid maize for different conditions.
Rising food prices
have ramped up investor interest in agriculture, with Boston-based farm
consultancy, High Quest, seeing inflows of private capital in the
sector more than doubling to around $5 billion to $7 billion in two
years.
Africa is still only partially cashing in.
“What we are
finding is that there is a high level of excitement. However, because
the business climates in many African countries are less well-advanced
… Africa is still lagging,” Ms Brooks said.
Poor infrastructure, weak financial services, and concerns over land
rights are among the key concerns the World Bank is trying to tackle,
to encourage investors to turn to Africa, rather than other regions
where returns are quicker, she added.
REUTERS
